Newton, Iowa — Maytag’s board of directors decided last night to reconsider Whirlpool’s revised proposal, announced on July 22.
The board determined that the new Whirlpool proposal may reasonably be expected to lead to a transaction that is financially superior to Maytag’s pending deal with the Ripplewood-led Triton Acquisition group, and Maytag’s board said it is reasonably capable of being completed.
This determination is a prerequisite for Maytag to furnish information to, and have discussions and negotiations with Whirlpool, under Maytag’s existing agreement with Triton.
Maytag stated that, in reaching its determination, the board took into account Whirlpool’s assertion of a complete lack of opposition to the transaction from the top 20 trade customers and buying groups, including the top four retailers and top three buying groups that represent 90 percent of retail appliance sales.
Maytag said that it expects that the terms of a definitive agreement, if any, with Whirlpool will take into account the risks to Maytag of non-consummation, Whirlpool’s assertion that the anti-trust clearance process can be completed by the end of 2005, and Whirlpool’s overwhelming confidence that there is no anti-trust problem in a Maytag/Whirlpool combination.
For example, Whirlpool has publicly stated that the transaction poses “no risk to competition,” that it is “not motivated by, nor could it produce, anti-competitive effects,” and that “there is no plausible concern that competition would diminish in any product category.”
Maytag also reported that following Whirlpool’s earlier proposal, Triton informed Maytag that, in its view, the transaction proposed by Whirlpool did not satisfy the prerequisites for Maytag’s board making the determination required under the merger agreement.
Triton has also advised Maytag that discussions, negotiations and/or due diligence by Maytag with Whirlpool will, in Triton’s view, give Triton the right to terminate the existing merger agreement. Maytag believes that its actions are in accord with the merger agreement and do not give Triton any termination rights.
Triton previously expressed dismay over Maytag’s courting of Haier American Trading as a potential buyer earlier this month. (Please see Triton Pressures Maytag After Haier Offer.) Maytag originally agreed to accept a buyout offer from Triton’s parent organization, Ripplewood Holdings, in mid-May before Haier and Whirlpool joined the fray. (Please see Maytag To Be Acquired By Investment Group)
Maytag also said that its board has not changed its recommendation of the existing Maytag/Triton transaction. Still, Maytag indicated in its statement that it wants to keep its options open.
However, Maytag noted that before it would be willing to share competitively sensitive information it would require greater certainty with respect to the following: the timing of the completion of the proposed deal; the form of consideration and the valuation of any stock consideration; Whirlpool’s due diligence process; and the mechanisms referred to by Whirlpool to address regulatory and other closing risks.
In contrast, the Triton transaction is expected to close within a month and, subject to shareholder approval and completion of financing, has already satisfied the major conditions to closing, Maytag said.